Chattanooga to add 1,000 jobs, second Volkswagen facility with $800 million investment

By MIKE PARE Chattanooga Times Free Press

Tuesday

Jan 15, 2019 at 12:01 AMJan 15, 2019 at 11:02 AM

CHATTANOOGA — Volkswagen plans to invest $800 million more into its Chattanooga plant to make electric vehicles and hire 1,000 more workers, officials said Monday.

Tennessee Gov. Bill Haslam and Department of Economic and Community Development Commissioner Bob Rolfe along with Volkswagen AG announced that Chattanooga will be home to the company’s first electric vehicle manufacturing facility in North America.

Chattanooga will be the first manufacturing facility in North America that will produce vehicles using Volkswagen’s modular electric toolkit chassis, or MEB. The first Volkswagen electric vehicle will roll out in 2022.

“The U.S. is one of the most important locations for us, and producing electric cars in Chattanooga is a key part of our growth strategy in North America,” Volkswagen CEO Herbert Diess said today. “Together with our ongoing investments and this increase in local production, we are strengthening the foundation for sustainable growth of the Volkswagen brand in the U.S.”

Volkswagen expects to sell 150,000 electric vehicles by 2020 and 1 million by 2025. In addition to Chattanooga, the company is also building an electric vehicle facility in Zwickau, Germany, and is adding electric vehicle production to two plants in China and to two other facilities in Germany.

“The shift toward electric vehicles is a trend that can be seen worldwide, and Volkswagen’s decision to locate its first North American EV manufacturing facility in Chattanooga underscores Tennessee’s manufacturing strength and highly-skilled workforce,” Haslam said in a statement.

“For more than a decade, Volkswagen has proven time and again that when they invest in Chattanooga, their company and our community succeed together.”

Volkswagen employs 3,500 people in Tennessee and at year end will have invested $2.3 billion in the facility. The Chattanooga plant already produces the midsize Atlas SUV and Passat sedan and will begin building the Atlas Cross Sport, a five seat version of the model, this year.

“Today’s announcement is a tremendous win for Tennessee as it shows that our state continues to be a prime location for foreign direct investment,” Department of Economic and Community Development Commissioner Bob Rolfe.

State officials said they could not yet provide information on financial incentives for the electric production and that they are still completing negotiations. The Chattanooga plant has received more than $800 million in federal, state and local incentives in the past decade

“This is another exciting day for Volkswagen and Hamilton County,” Hamilton County Mayor Jim Coppinger said. “Volkswagen has again proven to be a tremendous economic partner with this $800 million expansion that will create another 1,000 jobs for Hamilton County.”

“Volkswagen’s latest investment in Chattanooga is great news for our city. The 1,000 jobs this line will create means wages are growing and our city is stronger,” Chattanooga Mayor Andy Berke said. “For more than a decade, Volkswagen has proven time and again that when they invest in Chattanooga, their company and our community succeed together.”

Volkswagen of America will offer the first EV based on the MEB platform to customers in 2020. This vehicle will be a series-production version of the ID. CROZZ SUV concept, first shown at the North American International Auto Show last year. This vehicle will have the interior space of a midsize SUV in the footprint of a compact SUV. Volkswagen of America will also offer a multi-purpose EV based off the ID. BUZZ concept.

“We could not be prouder to build the future of mobility here in the U.S.,” Keough said in an announcement today.

“We’re known as ‘the people’s car’ for a reason, and our EVs will build on that tradition.”

Globally, Volkswagen Group plans to commit almost $50 billion (44 billion euros) through 2023 toward the development and production of electric vehicles and digital services. The Volkswagen brand alone has forecasted selling 150,000 EVs by 2020 worldwide, increasing that number to 1 million by 2025.

“Volkswagen is continuing to invest in the US to broaden its manufacturing and R&D footprint,” Diess said. “Projects like the electric car production announced today and changes in our sourcing decisions are in line with the current direction of trade policy including the USMCA.”

VW’s announcement follows General Motors’ decision that it will produce its new Cadillac XT6 crossover in Spring Hill. The Middle Tennessee location, which employs nearly 3,500 workers, is the product of an over $2 billion investment since 2010 is now the largest GM facility in North America at 7.1 million square fee.

“Volkswagen and General Motors’ decisions are further proof that Tennessee workers and our business friendly climate create a great place for jobs growth,” U.S. Sen. Marsha Blackburn, R-Tennessee, said today “These decisions will each benefit their respective regions tremendously.”

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